We are well into peak season and Black Friday is just days away.
In this QAD Precision Report we look at the importance of multi
carrier shipping solutions to ensure timely and cost-effective deliveries.
The holiday season is officially here, and with that comes some of
the busiest shopping days of the year — Black Friday and Cyber Monday.
Black Friday, which falls the day after Thanksgiving, originated in
the US, but it has spread around much of the world. Shoppers across
Europe, Canada, Australia, South Africa and many other countries look
for deep discounts and holiday deals on Black Friday.
This year Black Friday falls on 29 November, and its online
equivalent, Cyber Monday, takes place on 2 December. However, it is
almost impossible to separate these shopping events. First of all,
Black Friday deals are offered online as well as in store. According
to Adobe Analytics, Black
Friday online sales spiked nearly 24 percent in 2018, with a huge
$6.22 billion spent online in the US. In addition, many
retailers kick off their sales before Black Friday — in fact, shoppers
are increasingly making online purchases on Thanksgiving Day itself as
well as in the days before. All in all, according to the National
Retail Federation, US consumers spent $707.5
billion during the holiday season in 2018. Of that figure,
$146.8 billion went to online and other non-store retailers.
Millions of Sales; Millions of Returns
Many retailers make the bulk of their sales during the holiday
period. Even those with steady year-round sales can ill afford to miss
out on holiday shopping. However, as consumers increasingly shop
online, retailers must ensure that their fulfillment and delivery
strategy is fit for purpose. Deloitte forecasts that online sales will
grow between 14
to 18 percent compared with 2018.
To prepare for peak season, both UPS
and FedEx went on hiring blitzes. In September, UPS
announced plans to add 100,000 seasonal workers, while FedEx was
looking to increase staff by 55,000. These hires — chiefly package
handlers, drivers and driver-helpers — are necessary to help carriers
manage peak season volumes. On an average day, UPS handles around 20
million packages. Jim Barber, UPS chief operating officer, predicted
that during peak season, this volume would nearly double.
FedEx is expecting high volumes too, and the carrier predicts that it
will deliver more than 33
million packages on Cyber Monday alone.
Of course, high volumes of parcels moving between retailers and
consumers are accompanied by high volumes of returns. Earlier this
forecast that returns will peak on 2 January 2020. The
carrier predicts that 1.9 million returns will take place on that day
alone. This would be a 26 percent increase from the peak return day in
2018. Furthermore, UPS also predicts that 1.6 million returns will
take place every day in the week before Christmas Day.
The Complexities of Manual Multi Carrier Compliance
These holiday season volumes show the importance of multi carrier
solutions. Retailers that fail to deliver purchases in a timely
fashion are likely to experience a higher than usual number of
returns. In the early days of online shopping, volumes were
substantially lower. That meant that it was preferable for a retailer
to use a single carrier in order to avail of volume discounts. Many
retailers still prefer to work with one carrier, as it makes managing
the partnership easier. However, a single carrier strategy has its
risks, including monopoly-like pricing, capacity issues, and fewer
delivery options for customers.
Shippers who have agreements with multiple carriers often have
separate workstations to process shipments with each one. Each carrier
has its own requirements, and shippers are obliged to comply with the
standards of the carriers they use. When staff need to switch between
different rules it is easy for mistakes to happen. And every mistake
comes with a cost— delayed deliveries, lost packages and angry customers.
In addition, it is time- and labor-intensive to manually compare
rates and routes to choose the best carrier for each shipment. When
you process hundreds of shipments each day, this is simply unworkable.
Equally importantly, working across separate systems means your
parcel shipping data is siloed. As a result, having a clear picture of
your parcel shipping spend is far more difficult.
Multi Carrier Shipping and Delivery Personalization
Whatever you sell and wherever you ship, the end goal is to deliver
your products to your customers on time, in perfect condition — and
ideally at the least cost to you. Any retailer that fulfills online
orders needs to both manage and meet customer expectations, all while
keeping an eye on the bottom line.
Not every retailer can or should compete with Amazon Prime’s free
next day delivery promise. However, by leveraging multiple carriers,
retailers can give customers the one thing we all want: choice. As
more and more shopping is done online, customized shipping options
have become considerably more important. Retailers therefore need
tools to accommodate delivery personalization.
How Multi Carrier Shipping Solutions Can Help
GET THE BEST RATE FOR EVERY SHIPMENT
carrier shipping solution with multi carrier compliance
offers many benefits. By leveraging a comprehensive multi carrier
solution, you will be able to seamlessly switch between carriers from
a single system. As a result, you’ll get the best rate, route, service
level and transit time for every delivery.
EMPOWER DELIVERY PERSONALIZATION
There is no one-size-fits-all shipping service that will suit all of
your customers. Many will prefer home delivery, certainly, but store
pick-up is growing in popularity. Cost is an important factor too. The
UPS Pulse of the Online Shopper found that 41 percent of
respondents had abandoned a purchase because the delivery costs were
higher than expected.
KEEP THE CUSTOMER INFORMED EVERY STEP OF THE WAY
Shoppers and logistics managers have something in common: they both
want to know where their packages are! A robust multi carrier shipping
solution will keep both customers and retailers fully informed about
the status of deliveries.
REDUCE CART ABANDONMENT WITH FLEXIBLE RETURNS
Online shoppers are three times more likely to return purchases than
shoppers choosing goods in brick-and-mortar stores. Multi carrier
shipping solutions can assist here too. Some carriers may be fantastic
for outbound deliveries, but cannot offer the reverse logistics
capabilities your company needs, or may not offer competitive rates.
With multi carrier shipping solutions you can mix-and-match carrier
capabilities to create a flexible returns strategy that meets the
needs of customers, while also ensuring that your goods are returned
at the lowest possible cost.
RELY YOUR SUPPLIER FOR MULTI CARRIER COMPLIANCE
Carriers are exacting when it comes to making shippers comply with
their labeling and electronic communication standards. They have to
be. If carriers were lax about enforcing these standards, it would not
be possible for them to process high volumes through their networks,
particularly during peak season.
Luckily, when you a leverage multi carrier shipping solution, your
provider is responsible for ensuring that you remain compliant with
carrier standards and requirements.
About QAD Precision – Trusted Global Trade and Transportation Execution
QAD Precision (Precision Software), a division of QAD Inc., provides
trade management, transportation
execution and multi
carrier shipping software solutions from a single,
integrated platform. Preeminent industry leaders in every region of
the world rely on QAD Precision’s global support centers to leverage
thousands of carriers and manage millions of shipping transactions
every day. Our open architecture easily integrates with Enterprise
Resource Planning, Warehouse Management Systems and legacy solutions.
An ISO-certified company, QAD Precision assists companies to minimize
shipping costs, optimize first mile and last mile deliveries, automate
free trade agreement compliance, avoid customs delays and
the risks associated with dynamic trading environments to
maximize their competitive advantage. QAD Precision’s customers span
multiple industries including banking and finance, life sciences, high
technology, retail, industrial, automotive, higher education and
public sector as well as logistics providers. For more information
about QAD Precision, visit www.qadprecision.com.
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